It’s
not the greatest news, and according to law firm Drinker, Biddle & Reath,
the DOL has been turning up the heat on service provider investigations. For a
number of years it’s been targeting registered investment advisers, and has
also begun to target broker/dealers and recordkeepers, the law firm said in a
webinar presentation, “Surviving DOL Service Provider Investigations.”

According
to Drinker Biddle, the investigations seem to be part of the DOL’s ongoing
Fiduciary Service Provider Compensation Project, which focuses on “the receipt
of improper or undisclosed compensation by employee benefit plan consultants
and investment advisers.” The main point is to make sure that plan fiduciaries
and plan participants receive comprehensive disclosure about service provider
compensation and conflicts of interest. The Employee Benefits Security
Administration (EBSA) will also conduct criminal investigations of potential
fraud, kickback and embezzlement involving advisers to plans and participants.

One
way investigations of service providers arise is when the DOL is looking into a
retirement plan and finds an issue, and then moves over to the service
provider, noted Fred Reish, chair of the Financial Services ERISA team, at
Drinker, Biddle & Reath. “They found problems in conflicts of interest,
self-serving or self-dealing areas,” Reish said.

But there are ways to
survive, which Drinker Biddle, detailed in its webinar.